EconStor Community: Center for Financial Studies (CFS), Universität Frankfurt a. M.http://hdl.handle.net/10419/121
Center for Financial Studies (CFS), Goethe University FrankfurtEconStorhttp://www.econstor.eu/retrieve/99864http://hdl.handle.net/10419/121
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Understanding the decline in the price of oil since June 2014http://hdl.handle.net/10419/106822
Title: Understanding the decline in the price of oil since June 2014
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<br/>Authors: Baumeister, Christiane; Kilian, Lutz
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<br/>Abstract: Some observers have conjectured that oil supply shocks in the United States and in other countries are behind the plunge in the price of oil since June 2014. Others have suggested that a major shock to oil price expectations occurred when in late November 2014 OPEC announced that it would maintain current production levels despite the steady increase in non-OPEC oil production. Both conjectures are perfectly reasonable ex ante, yet we provide quantitative evidence that neither explanation appears supported by the data. We show that more than half of the decline in the price of oil was predictable in real time as of June 2014 and therefore must have reflected the cumulative effects of earlier oil demand and supply shocks. Among the shocks that occurred after June 2014, the most influential shock resembles a negative shock to the demand for oil associated with a weakening economy in December 2014. In contrast, there is no evidence of any large positive oil supply shocks between June and December. We conclude that the difference in the evolution of the price of oil, which declined by 44% over this period, compared with other commodity prices, which on average only declined by about 5%-15%, reflects oil-market specific developments that took place prior to June 2014.Wed, 29 Oct 2014 22:58:59 GMTHow risky is college investment?http://hdl.handle.net/10419/106821
Title: How risky is college investment?
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<br/>Authors: Hendricks, Lutz; Leukhina, Oksana
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<br/>Abstract: This paper is motivated by the fact that nearly half of U.S. college students drop out without earning a bachelor's degree. Its objective is to quantify how much uncertainty college entrants face about their graduation outcomes. To do so, we develop a quantitative model of college choice. The innovation is to model in detail how students progress towards a college degree. The model is calibrated using transcript and financial data. We find that more than half of college entrants can predict whether they will graduate with at least 80% probability. As a result, stylized policies that insure students against the financial risks associated with uncertain graduation have little value for the majority of college entrants.Wed, 29 Oct 2014 22:58:59 GMTHow risky is college investment?http://hdl.handle.net/10419/106821
Title: How risky is college investment?
<br/>
<br/>Authors: Hendricks, Lutz; Leukhina, Oksana
<br/>
<br/>Abstract: This paper is motivated by the fact that nearly half of U.S. college students drop out without earning a bachelor's degree. Its objective is to quantify how much uncertainty college entrants face about their graduation outcomes. To do so, we develop a quantitative model of college choice. The innovation is to model in detail how students progress towards a college degree. The model is calibrated using transcript and financial data. We find that more than half of college entrants can predict whether they will graduate with at least 80% probability. As a result, stylized policies that insure students against the financial risks associated with uncertain graduation have little value for the majority of college entrants.Wed, 29 Oct 2014 22:58:59 GMTUnderstanding the decline in the price of oil since June 2014http://hdl.handle.net/10419/106822
Title: Understanding the decline in the price of oil since June 2014
<br/>
<br/>Authors: Baumeister, Christiane; Kilian, Lutz
<br/>
<br/>Abstract: Some observers have conjectured that oil supply shocks in the United States and in other countries are behind the plunge in the price of oil since June 2014. Others have suggested that a major shock to oil price expectations occurred when in late November 2014 OPEC announced that it would maintain current production levels despite the steady increase in non-OPEC oil production. Both conjectures are perfectly reasonable ex ante, yet we provide quantitative evidence that neither explanation appears supported by the data. We show that more than half of the decline in the price of oil was predictable in real time as of June 2014 and therefore must have reflected the cumulative effects of earlier oil demand and supply shocks. Among the shocks that occurred after June 2014, the most influential shock resembles a negative shock to the demand for oil associated with a weakening economy in December 2014. In contrast, there is no evidence of any large positive oil supply shocks between June and December. We conclude that the difference in the evolution of the price of oil, which declined by 44% over this period, compared with other commodity prices, which on average only declined by about 5%-15%, reflects oil-market specific developments that took place prior to June 2014.Wed, 29 Oct 2014 22:58:59 GMT